How to run a profitable tourism business

There are many facets to running a profitable tourism, hospitality and leisure business.

This starts right at the beginning, with ensuring you have a sound business strategy. This comprises knowing your business’ plans, actions, and goals to carry out your vision and purpose.

It is essential to understand who your ideal, profitable customers are. In the tourism, hospitality and leisure industry, customer experience is everything. Your product/service/experience will not be suited to all people, so knowing who your profitable customer is, is essential to guiding your marketing strategy, knowing how to reach them and how to provide them with an outstanding experience.

In terms of your financial metrics, price setting is an important factor in profitability, as is cost management. Competitor analysis and benchmarking can assist with making these decisions. It is also worth noting that when you are competing for the customer’s dollar, the competitor set may be very broad – everything from food and beverages through to clothing and souvenirs.

The tourism, hospitality and leisure industry is very seasonal, particularly in Northland which does not experience a ‘true’ winter. It is essential to understand those seasonality trends in your business and how they impact revenues, expenses, cancellations, capacity and staffing requirements etc. Forecasting is a key tool that enables you to smooth cashflow and assist with capital expenditure planning.

All of these core considerations should be supported by effective processes, and by remaining flexible in a seasonal and fluctuating business environment.